- Need confidence to come back, vaccination needs to start, and expanded fast
- Need confidence for revival in services economy, as it forms 50% of GDP
- Fiscal prudence by FM means long-term scars of Covid-19 will be much less
India’s economy has shown resilience in the face of the Covid crisis. Swaminathan Aiyar believes this show of strength can add even more muscle, if the vaccine rollout gets off the ground faster, both in India and across-the-world. For Swami, the real panacea for firing up growth is a quick mass vaccination drive. That, followed by a spending spree has the ability to transform India’s growth numbers in 2021, he said.
This can be led by India’s services sector in 2021, which he thinks should return to normalcy, much ‘faster than in the West’. Services add about 50% to India’s GDP. Subsequently, he believes an efficient and swift rollout of vaccination is the key to revive growth in the services sector.
Hopefully, the vaccine will address the fears in the mind of the people to go out and travel, or consume, seek entertainment, and so on.
Swami also told ET NOW, that a prudent fiscal stimulus during the peak of the pandemic has meant that India in now in a better macro health. The missing piece now in an impetus to reform. Getting growth back will need India to address the serious issue of competitiveness.
The journey still is long. Any risk of rising infections needs to be dealt with very seriously. Swami fears any resurgence could make things difficult for India. On top of it, the deep structural problems continue to stare at us even in 2021. But Swaminathan Aiyar feels the economic resilience is a reason to cheer.